Singh says India can return to high growth

NEW DELHI 
Prime Minister Manmohan Singh wooed India's top business leaders Wednesday, promising to cut the red tape stifling investment in the country and invest in badly needed infrastructure projects.

Singh's speech was an effort to win back the electoral support of a crucial constituency that soured on his corruption-riddled government.

Singh appealed to leaders convened by the Confederation of Indian Industry, the country's biggest industry grouping, to have faith in the Indian economy.

Just a few years ago, India was seen as a rising economic power approaching 10 percent growth, but that rate has drastically fallen recently. Growth was 5.5 percent in the last quarter.

"I would urge Indian industry to have faith in our determination and avoid getting swamped by a mood of negativism," Singh said.

Singh acknowledged that corruption, bureaucratic inertia and the many pulls posed by a disparate coalition government have hurt the business climate. He stressed the government would do its part by removing the "many impediments affecting the implementation of infrastructure projects."

"There are many projects that have been stuck, either for want of regulatory clearances, or, in the case of power projects, because of fuel supply problems," Singh said.

He acknowledged that government decision-making had slowed down and said often this was on account of hesitation on the part of officials to make critical decisions. He said the government would help by easing regulations and granting faster clearances.

Singh said in the coming months his government would act to remove hurdles to investment and boost basic infrastructure such as ensuring power supplies and roads.

Steps taken by the government, including liberalization of foreign investment in retail, aviation, broadcasting and insurance, should help return the economy to a higher growth trajectory, Singh said. The government has sought to counter business criticism with a spate of reforms last year.

Singh's speech was viewed as an attempt to win over Indian industry before 2014 elections. Business leaders have vocally criticized the government for the slow pace of economic reforms.

In recent years, some of India's top business leaders have embraced a divisive opposition leader, the chief minister of Gujarat state, Narendra Modi, as a possible future prime minister.

Modi, of the Bharatiya Janata Party, has been hailed as a strong economic steward who has created a favorable business climate in his state, but he is also tarred by 2002 anti-Muslim riots that took place on his watch and has been branded a Hindu fundamentalist.

Singh also appealed to foreign investors to come to India and said the government was reviewing policies to see how it could encourage more foreign direct investment.

"We have given clear signals that we welcome foreign investment, which has a critical role in bringing in modern technology and globalizing our economy," Singh said.